Eye On The Market

Eye On The Market

Join Michael Cembalest as he explores a wide variety of investment topics, including the economy, policy and markets.

From Here to Eternity

From Here to Eternity: tracking Trump’s economic, market and constitutional milestones Whether you’re elated or despondent about the blizzard of changes taking place in Washington, let me remind you of something: two years is an eternity in US politics. In this month’s note, we include a Trump policy impact tracker, and an assessment of the statutory and constitutional challenges that Trump policies face as the administration explores the outer limits of executive power. View video here

02-13
10:30

Inauguruption: the flurry of Trump 2.0 executive orders

Trump 2.0 is a hodgepodge of distinctly American political strains: the bare-knuckled nationalism and anti-elitism of Andrew Jackson, the tariff-loving protectionism of William McKinley, the small-government/pro-business policies of Calvin Coolidge, the unforgiving enemies lists of Richard Nixon, the deportation policies of Dwight Eisenhower, the manifest destiny of James Polk and the isolationism of 1914-era Woodrow Wilson. American First policies announced yesterday create risks for investors since its supply side benefits collide with its inflationary tendencies; there’s not a lot of room for error at a time of elevated US equity multiples. View video here

01-21
19:45

Eye on the Market Outlook 2025: The Alchemists

Deregulation, deportations, tariffs, tax cuts, cost cutting, crypto, oil & gas, medical freedom and Agency purges: What could possibly go wrong? Sections include the AI Golden Goose, the invisible nuclear renaissance, DOGE Quixote, the two China traps, Dr. Seuss goes to Europe, a crypto update and the 2025 Top Ten list. View the video here

01-01
36:13

The Year of Living Dangerously

I was visited by six ghosts recently warning me of dangers related to predictions, allocations, apparitions, legalizations, expurgations and ablations. Here’s what they said. View video here

12-10
16:34

"Kamilton": the 2024 election and who tells your story

A reflection on the 2024 election and who tells your story. On Trump’s victory: market implications of a supply side boost from deregulation clashing against inflationary impulses of tariffs and deportations. The ten year Treasury will be the most reliable barometer of all. To conclude, an ode to vaccines and an RFK bibliography.

11-06
20:02

The Thucydides cap on the China equity rebound trade

For participants in the China equity rebound trade: once you hit your return targets, take the money and run. Click here to read the full PDF and view the video.

10-17
14:14

Mind the Gap: a historically polarized US election

Candidate policy comparisons in a historically polarized US Election; China stimulus package The US is about to conduct its most polarized Presidential election in 100 years. Today’s note looks at candidate policy differences and implications for investors: government spending, taxation, tariffs, trade, immigration, regulation, NATO, energy, price controls and the Electoral College. We conclude with analysis of the China stimulus package, which might have a better chance of succeeding than recent failed efforts.

09-30
29:24

A severe case of COVIDIA: prognosis for an AI-driven US equity market

NVIDIA and its GPU customers are now a large driver of equity market returns, earnings growth, earnings revisions, industrial production and capital spending. View video here

09-03
25:26

There’s no place like home

A surge in the Japanese Yen is resulting in home repatriation of Yen-funded positions overseas, and close-out of Yen-funded positions abroad. While Google was found guilty of home bias anti-competitive search engine behavior, any judicial remedies may be worse for recipients of Google’s “shelf space” payments than for Google itself. Work-from-home trends have plateaued at ~30%, which has important implications for distressed office investors. Most distressed sales now require discounts of 60%+ vs pre-COVID levels; the fundamentals of the office sector explain why. View video here

08-27
18:38

The Lion in Winter

From 1930 to 2010, there were six extended periods of small cap outperformance as it dominated large cap over that entire period. But since 2010, small cap sits alongside value stocks and non-US stocks in the unholy trinity of underperforming portfolio strategies. While poor profit fundamentals argue against a prolonged period of outperformance vs large cap, small cap stocks are at their cheapest levels in the 21st century with potential market and political catalysts in their favor. First, a few words on the CrowdStrike outage. View video here

07-23
16:43

The Supreme Court vs the Regulatory State

The Supreme Court vs the Regulatory State. Recent Supreme Court rulings may now usher in the largest pushback on the regulatory state since the Reagan Administration. A look at the end of Chevron deference, a revised statute of limitations for challenging government regulations, the Major Questions Doctrine, the right to a jury trial and a District Court injunction against Biden’s LNG export moratorium.

07-09
19:51

A Piece of the Action

Investing in professional sports leagues and related businesses. As rules around private equity ownership of sports leagues expand, we review team valuations and profitability, emerging sports categories, streaming and broadcast revenues, the decline of regional sports networks, drivers and comparisons of league parity, relegation and financial pressures in the English Premier League, stadium subsidies, sport betting and other adjacent businesses, antitrust issues, the esports winter, the worst teams that money can buy and the best basketball players of all time. View video here

06-06
09:09

Animal Farm

With spring planting season having arrived in Zone 7, it’s a good time to review agriculture from an investor’s perspective. Topics include agricultural price inflation in the wake of Russia’s invasion of Ukraine; public and private equity investments in agriculture, farmland ownership and the drivers of farmland returns; seed bio-engineering designed to reduce consumption of fertilizer, fungicide and water; and some satellite data on the immense agricultural damage occurring in Gaza and Israel. The Appendix addresses the avian flu’s impact on agriculture and the food supply. View transcript View video here

05-15
23:33

Cicadian Rhythms

Cicadian Rhythms: the fading prospects of a US disinflationary boom; Japan’s structural reform/M&A emergence; and Eye on the Market mailbag responses to questions on Tesla/Musk, GLPs, housing, China, Truth Social and Meta’s latest open source model View video here

04-24
23:31

The Good, the Bad and the Ugly

The Good, the Bad and the Ugly: an investor lens on tech valuations, AI, energy and the US Presidential Election. View video here

04-02
19:14

Electravision

This Eye on the Market is about the predominant vision for the future which involves the electrification of everything, powered by solar, wind, transmission and distributed energy storage. View video here

03-05
22:12

Five Easy Pieces

Five Easy Pieces: on Magnificent 7 stocks, open source large language models, the No Labels movement, the Armageddonists and bottom-fishing in Chinese equities. View video here

02-08
19:11

Medical Complications

This Eye on the Market is about all the things that can be true at the same time. The collapse of the political middle in Congress should not be an excuse for everyone else to abandon the ability to believe things that may appear contradictory, but which are all part of a more complicated reality. View video here

01-23
11:49

Outlook 2024 - Episode 3: Deep Dive—Top Ten Surprises

A top ten list on what might happen… not what will happen, in honor of strategist Byron Wien View video here

01-17
15:52

Outlook 2024 - Episode 2: Deep Dive—The Fats Dominoes

The impact of weight loss drugs on equity markets. View video here

01-10
18:14

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